Pm595 Risk Paper1

Sources of construction project risk

The PMI defines sources of risk as categories of possible risk events that may affect the project for better or worse. Risks in the construction project development could constrain the achievement of the key project objectives – time, cost and quality targets. People refer to project management as having three components: time, money, and scope. Reducing or increasing any one of the three will probably have an impact on the other two. If a company reduces the amount of time it can spend on a project, that will affect the scope (what can be included in the project) as well as the cost (since additional people or resources may be required to meet the abbreviated schedule) it is same thing for the risk management. “Development of the Boeing 787 Dream liner project sources of risks could be into two major groups:

* Internal sources include risk elements, organization’s resources and management including labor skills and availability, material delivery and quality, equipment reliability and availability, and managerial efficiency

* External sources, on the other hand, include risk elements which are not within the control of key stakeholders such as level of competition, economic related and political related and natural disasters.

Internal sources could be controllable but external sources uncontrollable of key stakeholders.

Internal (controllable) sources

The internal (controllable) risk sources as identified in our project could be further broken down into four sub-groups:

Risks from the suppliers

Three risk factors were established to be significant under this category.

* Delays in the supply of equipment, materials and components

* Inability to fulfil supply obligations as and when needed

* Supply defective materials / components

These risk factors cause to increase the project cost and overtime.

Risks from Project management...